FG Vows to End CBN’s Money Printing Amidst Budget Challenges

In response to the fiscal challenges confronting the 2024 national budget, the Federal Government (FG) has declared its intention to cease the Central Bank of Nigeria’s (CBN) practice of printing money via Ways and Means to cover budget deficits.

Speaking to journalists in Lagos, the Minister of Budget and National Planning, Atiku Bagudu, outlined the government’s decision, emphasizing a shift toward issuing bonds as an alternative means of funding, with the added benefit of attracting private investments.

Bagudu clarified, “The central bank is not going to print money for the government anymore. If we borrow from the Central Bank, it will be within the legal limits, not exceeding 5% of the previous year’s revenue. We have been exceeding that limit, and if borrowing is necessary, we will resort to issuing bonds.”

Highlighting the potential for private investors to engage in government bonds, Bagudu acknowledged the option as an opportunity for those with available funds to contribute to national development.

The 2024 budget projected a deficit of N9.2 trillion, approximately 3.9% of the GDP. However, adjustments made by the National Assembly to key revenue lines resulted in increased expenditure assumptions, factoring in higher oil revenue and exchange rate gains than initially budgeted by the Federal Executive Council.

Addressing the altered budget figures, Bagudu acknowledged the democratic process’s complexities, citing instances of budget shutdowns in advanced democracies. He urged cooperation and oversight from all branches of government to achieve the set thresholds.

Responding to concerns about continued borrowing despite high national debt, Bagudu explained the necessity of meeting irreducible minimum spending requirements, citing education and security challenges. He emphasized the urgency in addressing crucial commitments while acknowledging the financial constraints faced by the government.